Over the next few weeks Australians will pore over a range of bank statements in order to complete our income tax returns. It’s a good opportunity to discover which accounts are charging excess fees, and if you reckon you’re paying too much it’s time to take your business elsewhere.
A recent industry report shows bank fees continue to gouge a hole in our finances. The average Australian household currently pays just under $9 each week in bank charges.
It may not be much in isolation, but it adds up. Over the course of a year it works out to around $465. Over ten years those fees are starting to approach $5,000. I reckon that’s money we could all put to better use.
If you’re not happy with the fees charged on your everyday account there are plenty of opportunities available to get a better deal. If you’re a pensioner, student, or you’re opening an account for a child, ask your financial institution about fee-free account options.
Even if you don’t fall into one of these categories, there are a number of transaction accounts available that have virtually done away with fees altogether.
As a guide, National Australia Bank offers a Classic Bank account that charges no monthly fees and no overdrawn fees.
Bankwest’s Zero account has also wiped a range of common fees though you will need to deposit at least $2,000 each month into the account. Your wage or salary should cover this.
ING DIRECT’s Orange Everyday Account charges no monthly account keeping fees and you can use any ATM in Australia without paying ATM fees as long as your withdrawal is for $200 or more.
These are just some of the accounts that make it easy to save on fees. Take a look at comparison sites like Mozo or RateCity for more options.
I reckon plenty of people stick with an expensive everyday account because it seems all too hard to change to a new account. If that sounds like you, bear in mind that account switching legislation introduced in July last year means your new financial institution has to do all the legwork changing regular direct debits and credits from your old account to the new one.
Even if you select a zero-fee account it pays to be mindful of your own banking behaviour. Foreign ATM fees apply when you use an ATM not linked to your own bank’s network. These fees are charged by the owner of machine themselves, so they’re not something you can normally blame on your own bank and they can really add up over time.
It’s possible to avoid or at least minimise foreign ATM charges by planning your cash needs so that you’re not forced to use a foreign ATM. Or withdraw cash fee-free when you make a purchase via EFTPOS.
For more ideas on ways to get more from your money – and save on bank fees in the new financial year, take a look at my book Making Money.